{"id":8956,"date":"2023-12-01T00:05:47","date_gmt":"2023-12-01T00:05:47","guid":{"rendered":"https:\/\/topat10.com\/?p=8956"},"modified":"2023-12-01T00:05:47","modified_gmt":"2023-12-01T00:05:47","slug":"housing-affordability-is-the-worst-its-been-in-decades-it-will-improve-in-2024-but-by-only-a-small-step-realtor-com-chief-economist-says","status":"publish","type":"post","link":"https:\/\/topat10.com\/?p=8956","title":{"rendered":"Housing affordability is the worst it\u2019s been in decades. It will improve in 2024, but by only a \u2018small step,\u2019 Realtor.com chief economist says"},"content":{"rendered":"\n<p>Mortgage rates are expected to\u00a0drop next year, but not enough to make sky-high housing costs more affordable for potential homebuyers looking to break into the market, according to Realtor.com.\u00a0<\/p>\n<div>\n<p>\u201cWe do expect affordability to improve going into 2024. That\u2019s a cornerstone of our housing market forecast,\u201d Realtor.com chief economist Danielle Hale tells <em>Fortune<\/em>. \u201cBut it\u2019s going to be a pretty small step in that direction.\u201d\u00a0<\/p>\n<p>One of the positives for affordability is that Realtor.com forecasts the 30-year fixed mortgage rate will drop to an average 6.8% in 2024, more than a percentage point lower than the <a href=\"https:\/\/fortune.com\/2023\/10\/19\/buyers-sellers-prepare-for-8-mortgage-rate\/\" target=\"_self\" rel=\"noopener\" class=\"sc-1a1a52d0-0 iWRdns styledLinkColor \">8% peak this fall<\/a>. The rate  currently stands at 7.15%, according to <a href=\"https:\/\/www.mortgagenewsdaily.com\/\" target=\"_self\" rel=\"noopener\" class=\"sc-1a1a52d0-0 iWRdns styledLinkColor \">Mortgage News Daily<\/a>, but that\u2019s still almost three-quarters of a point higher than a year ago.\u00a0<\/p>\n<p>\u201cThis means that affordability is still worse than one year ago, but we expect to see this trend change,\u201d Hale says.\u00a0<\/p>\n<p>In other market data, a shortage of homes for sale is easing slightly. The number of newly listed homes in November grew 7.5% from a year earlier, the first gain in 17 months and another sign that the <a href=\"https:\/\/fortune.com\/2023\/11\/28\/home-prices-drop-affordability-morgan-stanley\/\" target=\"_self\" rel=\"noopener\" class=\"sc-1a1a52d0-0 iWRdns styledLinkColor \">frozen housing market could be starting to thaw<\/a>, according to another new report from Realtor.com on Thursday. <\/p>\n<p>While more listings are a \u201cwelcome gift for buyers\u201d for now, according to Realtor.com, \u201cthey will have to pay dearly for them.\u201d Median homes now cost $420,000, just 1% higher than the same time last year, Realtor.com data shows. But higher mortgage rates have increased the monthly cost of financing a home by 7.9%, or roughly $172 more per month compared with November 2022, according to Realtor.com.<\/p>\n<p>That\u2019s\u00a0the biggest increase in monthly home costs since Realtor.com started tracking this data in 2016, Hale said in a statement.\u00a0Today, homebuyers must make about $118,000 to \u201ccomfortably\u201d afford their housing payments, <a href=\"https:\/\/www.realtor.com\/news\/trends\/americas-housing-market-just-hit-a-new-record-homebuyers-cant-afford-to-ignore\/\" target=\"_self\" rel=\"noopener\" class=\"sc-1a1a52d0-0 iWRdns styledLinkColor \">according to Realtor.com<\/a>, Hale said in a statement.\u00a0<\/p>\n<h2 class=\"wp-block-heading\">2024 housing market forecast<\/h2>\n<p>Overall, Realtor.com forecasts that while mortgage rates will average 6.8% in 2024, they\u2019ll edge down to 6.5% by the end of next year. Meanwhile, home prices will drop 1.7%, it said, in contrast to what has been mostly annual gains since 2012.\u00a0<\/p>\n<p>Despite the current market turbulence, home prices are actually up 6.2% year-over-year as of September 2023, <a href=\"https:\/\/www.spglobal.com\/spdji\/en\/index-announcements\/article\/sp-corelogic-case-shiller-index-continued-to-trend-upward-in-september\/\" target=\"_self\" rel=\"noopener\" class=\"sc-1a1a52d0-0 iWRdns styledLinkColor \">Case-Shiller said this week<\/a>. Case-Shiller is among the leading housing market forecasting tools, but its numbers lag a couple months.\u00a0<\/p>\n<p>However, Craig J. Lazzara, managing director at S&amp;P <a href=\"https:\/\/fortune.com\/company\/dow\/\" target=\"_blank\" rel=\"noopener\" class=\"sc-1a1a52d0-0 iWRdns styledLinkColor \">Dow<\/a> Jones Indices, expects home prices to continue rising, but he didn\u2019t predict what housing prices would do next year specifically.\u00a0<\/p>\n<p>\u201cAlthough this year\u2019s increase in mortgage rates has surely suppressed the quantity of homes sold, the relative shortage of inventory for sale has been a solid support for prices,\u201d he said in a statement.\u00a0<\/p>\n<p>While Realtor.com expects housing affordability to improve slightly in 2024, the problematic lock-in effect is likely to persist, Hale says. Homeowners who locked-in their mortgages at sub-3% rates a couple of years ago have little to no motivation to sell now because they would end up buying homes with far higher monthly payments at current 7%-plus mortgage rates. A small decline to 6.8% is an improvement, but it may not move the needle enough to prompt current homeowners to finally sell.<\/p>\n<p>\u201cIn the big picture, this is still higher for longer [rates],\u201d Hale says, adding,: \u201cWe also think this means that the impact of higher mortgage rates, including the lock-in effect, are likely to continue to be a factor.\u201d<\/p>\n<\/div>\n<div data-cy=\"subscriptionPlea\">Subscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. <a href=\"https:\/\/www.fortune.com\/newsletters\/cfodaily?&amp;itm_source=fortune&amp;itm_medium=article_tout&amp;itm_campaign=cfo_daily\" target=\"_self\" rel=\"noopener\" class=\"sc-1a1a52d0-0 iWRdns styledLinkColor \">Sign up<\/a> for free.<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Mortgage rates are expected to\u00a0drop next year, but not enough to make sky-high housing costs more affordable for potential homebuyers looking to break into the market, according to Realtor.com.\u00a0 \u201cWe do expect affordability to improve going into 2024. That\u2019s a cornerstone of our housing market forecast,\u201d Realtor.com chief economist Danielle Hale tells Fortune. \u201cBut it\u2019s [&hellip;]<\/p>\n","protected":false},"author":49,"featured_media":8957,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[123],"tags":[],"class_list":["post-8956","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Housing affordability is the worst it\u2019s been in decades. It will improve in 2024, but by only a \u2018small step,\u2019 Realtor.com chief economist says | Unlock Informed Choices with Us<\/title>\n<meta name=\"description\" content=\"Mortgage rates are expected to drop modestly to 6.8% in 2024.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/topat10.com\/?p=8956\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Housing affordability is the worst it\u2019s been in decades. 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Lake","author_link":"https:\/\/topat10.com\/?author=49"},"uagb_comment_info":1,"uagb_excerpt":"Mortgage rates are expected to\u00a0drop next year, but not enough to make sky-high housing costs more affordable for potential homebuyers looking to break into the market, according to Realtor.com.\u00a0 \u201cWe do expect affordability to improve going into 2024. That\u2019s a cornerstone of our housing market forecast,\u201d Realtor.com chief economist Danielle Hale tells Fortune. \u201cBut it\u2019s&hellip;","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts\/8956","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8956"}],"version-history":[{"count":0,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts\/8956\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/media\/8957"}],"wp:attachment":[{"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}